How can a foreigner promote his goods on the Russian market? Exhibitions are an essential attribute for developing a business. The experts are categorical about this. Not in the exhibition means not on the market! Tatyana LISANOVA, of RussCom IT Systems, explains how a European or an American can find his way through the complex system of Russian exhibitions.

“Tatyana, you are conducting an audit of Russian exhibitions. That is, you are studying the number of those taking part in them, their qualitative makeup and even purchasing ability. Why is this?”

“For many years, the organisers of exhibitions only put out what information they thought fit about their activities. For example, an exhibition has been held. In order to attract participants to the next one, the organisers write: there were an estimated 500 participants, 30,000 people came to it, such-and-such contracts were signed. And next year people come, pay considerable sums to take part, but do not find what they were expecting: no new partners, no contracts. And this disillusion extends to the whole field of exhibitions. They no longer trust Russian exhibitions as a tool for promoting business.”

“So how great are the differences in figures?”I

t’s hard to say, because no-one has specially calculated it. It’s just that the participants subjectively – from what they feel, from the return – see that they’ll never make 30,000, 10,000 or 15,000 max out of it. And there aren’t many contracts, just gawpers wandering from one stand to another. Here is an example. Before the auditing procedure was introduced, the statistics showed something rather strange: Germany sells twice as much exhibition space as Russia. but only has half as many visitors. But this is nonsense, everyone realised that such figures must be the result of the Russian exhibition organisers cooking the books.”

Germany sells twice as much exhibition space as Russia, but only has half as many visitors. Nonsense!

“We have here the Russian Alliance of Exhibitions and Markets (REAM). This is a highly reputable organisation, which unites the biggest exhibition organisers and the owners of exhibition facilities. According to the REAM, about two thousand exhibitions and markets are held in Russia every year. In 2004, the Alliance decided to introduce the practice of independent auditing of exhibitions. Everywhere else in the world, this is considered normal. An open tender was held, and since then our company is their independent auditor, guaranteeing that the information about one exhibition or another corresponds with reality.”

“Are all exhibition organisers obliged to provide you with information?”

“No, of course not. An audit is a voluntary matter, for which the customer comprises the exhibition organisers themselves. It must be said that not all of them by a long way are willing to show their hand. Up to now, only 14 per cent of the total have submitted to the auditing check. But these 14 per cent cover 60 per cent of all exhibition facilities. That is, the majority of the major exhibitions have been audited. Furthermore, we are being invited to the CIS countries: Ukraine, Moldova, Kazakhstan, Azerbaijan.”

“It can take from $3000-5000 to $100,000 or more to participate in an exhibition, depending on the size of the stand and the extent of your participation. A moderate estimate for a stand with standard equipment and 24 sq.m. area (6 x 4 metres) would be on average $10-15,000. Leasing of exhibition space at prestigious exhibitions in the capital varies from $130 to $300 per sq.m. At regional exhibitions, prices are lower ($30-100 per sq.m.). And you at once have to add in the cost of travel, hotel, freight delivery and advertising.”

“So that means that those who are not being audited are probably inflating the figure.”

“No, I would not put it like that. Who knows for what reason the organisers refuse the auditing process? You could put it this way: the data from exhibitions which have been audited can be trusted absolutely. Any self-respecting exhibition trying to attract exhibitors orders an audit, thus making its statistical parameters public knowledge. Furthermore, we are not working for ourselves, we are monitored by the REAM. Our people scrupulously calculate the exhibition space, the number of exhibits, the visitors and the participating countries. The calculating methods and techniques are produced by the Global Association of the Exhibition Industry (UFI). We are a member of this organisation, and naturally we comply with them. All the data are published on our website, on the REAM website and on the major internet portals devoted to exhibition activities.”

“How should one choose the exhibition in which it would be most effective to participate?”

“It all depends on what you are setting out to achieve. Sometimes quite a small exhibition might produce the required effect. But all the same, the probability of success is higher at a major one, aimed at a greater number of visitors. An exhibition should be selected primarily from among those which have reliable statistical information on both the quantitative and qualitative composition of the visitors. Only if you have such data can you be sure that you will not find yourself standing by your exhibit in an empty hall. The “REAM” and Approved by UFI” marks can be used as an initial “cut-off point”. These serve as signs of quality in the exhibition industry. Of all the exhibitions being held in Russia now, 120 have the REAM mark and 78 are “Approved by UFI”.”

An audit is a voluntary matter, and not all of them by a long way are willing to show their hand.

“But this in itself is not enough: Exhibitions of 1200 and 50,000 sq.m. may have quality marks. Therefore we are marketing a new product: an All-Russian exhibition rating, compiled on the basis of exhibition audit data. This initiative came from the REAM and the Chamber of Commerce and Industry of Russia. We are completing the arrangements for the first rating now. It will become available to the public at large in February next year. Any potential exhibitor or visitor will be able to open this rating, find all the exhibitions broken down under 50 themes, and find the most suitable for his purposes.”

“You mentioned the qualitative composition of the visitors. How do you measure this?”

“It is important for any stand owner to know how many specialists come from companies. These are the ones who have come not just to gawp, they are prepared for actual business contacts. There are special methods. Our researchers poll people at the exhibition itself, and special questionnaires are filled in. They ask the visitors if they are specialists, where they have come from, if they are looking for anything specific and if they are prepared to conclude contracts. One may draw conclusions about the qualitative composition of the visitors from the results of such a questionnaire.”

The probability of success is higher at a major exhibition, aimed at a greater number of visitors.

“By the way, among other things, we are also conducting research into the so-called Buyer Opportunities (purchasing ability) of visitors. There is electronic registration at virtually all the exhibitions in the B2B (business to business) sector in Russia. We use these data for research. Six months after an exhibition, our researchers ring up 500-700 visitors and ask them how useful the exhibition was for them, whether they managed to make new contacts, whether they concluded contracts, and if so, for how much. Of course, not all of them answer. But the number of answers comes within international standards, which gives us the right to draw specific conclusions. A good buyer potential is the best recommendation for any exhibition. For example, we have conducted this sort of study for the “Furniture” Exhibition (organiser ZAO Expotsentr, Moscow). It turned out that for a total Russian furniture market of about ten billion dollars, contracts worth one billion had been concluded at the exhibition. That is quite a lot!”

“For which industries is it most effective to promote products by taking part in exhibitions?”

“There are no data directly reflecting this. But one can form an idea, for example from the number of exhibitions held concerning one industry or another. Most exhibitions are devoted to construction and finishing materials. After these come engineering, oil and gas, agriculture and power generation, and after them, exhibitions devoted to clothing and footwear, safety and other themes.”

We are marketing a new product: an All-Russian exhibition rating, compiled on the basis of exhibition audits.

“By the way, foreign companies participate very actively in Russian exhibitions. The Chinese take first place. They traditionally take part in exhibitions devoted to construction, IT and the food industry. In second place, Italy. Companies from that country prefer the fashion industry, and also construction and interior design. The Germans are in third place. They take an active part in exhibitions on construction and agricultural-industry themes.”

“However, one should not rely only on the number of exhibitions concerning the industry. In some sectors of the economy, there may be only one or two exhibitions, but very effective ones. This will be very well reflected in the rating.”

Foreign companies participate very actively in Russian exhibitions. The Chinese take first place.

“Are there any exhibitions worthy of attention in the Russian regions, or is it better to concentrate on Moscow and St. Petersburg?”

“Of course, the two capitals are the main centres for the exhibition business. The biggest exhibition sites and European-quality services are found in them. About 25 per cent of all exhibitions are held in Moscow and about 10 per cent in St. Petersburg. There are undoubtedly good exhibitions in other cities too. For example, in Novokuznetsk (“Russian Coal and Mining”), Ufa (“Gas. Oil. Technologies”), Kazan (“Volgastroyexpo”), Novosibirsk (“Stroysib”) Sochi (“Interjeweller”) and so on. And in making your choice, you must know what you hope to achieve. If you want to cover all Russia, it makes sense to exhibit in Moscow. But if you are aiming at some region in particular, then you have to go right there. However, it must be understood that unfortunately there are very few modern exhibition sites in the regions. So if you select an exhibition somewhere in the provinces, you must gather all possible information about it.”

If you want to cover all Russia, it makes sense to exhibit in Moscow. But if you are aiming at some region, then you have to go right there.

“Can the exhibition business itself be considered an attractive field for foreign investments?”

“It’s hard to say. There are foreign companies who have been operating here successfully for a long time: ITE, Reed Exhibitions, Messe Düsseldorf, Messe Frankfurt and others. They have bought many exhibition halls, both in Moscow and in the provinces. There is still insufficient exhibition space in the regions, and this could be food for thought for a potential investor. But it must be taken into account that prices for leasing stands are lower there, and this means you should not reckon on a quick return on investments. There is no such shortage in the capitals. It can happen that the exhibition centres are overbooked, and it can happen that they are standing idle. This is a seasonal phenomenon, so you can’t really judge the market requirements from it.”